December 15, 2020
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SUPERVISORS APPROVE CAP ON FOOD DELIVERY SERVICE FEES
SAN JOSE– The Santa Clara County Board of Supervisors today voted unanimously (5-0) to adopt an ordinance to put a temporary cap on commissions and fees charged by third-party food delivery services to local restaurants. The ordinance was initially proposed by County Supervisors Joe Simitian and Cindy Chavez at the December 8, 2020 Board meeting and goes into effect Saturday, December 19, 2020.
The Urgency Ordinance applies throughout Santa Clara County, including all 15 incorporated cities and the unincorporated County, except in cities with a more restrictive cap on order and delivery fees (the more restrictive provision/ordinance applies).
The proposed ordinance caps delivery service fees charged by third party delivery at 15% of the value of an order, and the fees for order and listing services (pickup/takeout) at 10% of the value of an order. The costs of compliance may not be imposed on delivery workers and allows enforcement through civil action by restaurants or delivery workers in the courts.
“I’m pleased we were able to turn this around in a week to meet the urgency of the situation, “said Simitian. “Many of these restaurants don’t have the infrastructure to host their own platforms for takeout and delivery, so they are often forced to accept excessive fees and commissions which can be up to 30% or more.”
Simitian also noted that, “COVID-19 already imposes extraordinary financial hardship on local restaurants, particularly now that both indoor and outdoor dining becomes limited/prohibited due to inclement weather and/or health and safety requirements.”
“Many of these businesses rely on third-party delivery vendors such as DoorDash, Uber Eats and Grubhub to meet their business’s delivery needs,” said Simitian. “While delivery vendors provide an important service, and are certainly within their rights to charge for such services, the current pandemic unfortunately creates opportunity for price gouging. That’s the problem we’re tackling.”
“At a time when local businesses are struggling to stay alive, when restaurant workers are at risk of losing their livelihoods, and the general public is struggling financially, we need to make sure that everyone is treated fairly," said Simitian.